POD Accounts Set Up by Ward for Guardian Are Returned to Estate

The Court of Appeals of Kansas sets aside POD accounts that had been established by an incompetent ward for the benefit of her guardian without the knowledge of the conservator or approval of the conservatorship court. In the Matter of the Estate of Steward (Kan. Ct. App., No. 90,209, Nov. 26, 2003).

In 1987, Denny Steward was appointed conservator and Mary Huggins was appointed guardian for Sandra Jo Steward, an incompetent person. During the conservatorship, Ms. Steward set up Pay on Death (POD) accounts with her earnings, all without knowledge or consent of the conservator or approval of the conservatorship court. Ms. Huggins, as well as Ms. Huggins' children and grandchildren, were named as beneficiaries on the accounts.

Following Ms. Steward's death in 2000, Mr. Steward was appointed as administrator of her estate. He filed a petition to determine ownership of the POD accounts. The probate court set aside the accounts and ordered the funds returned to Ms. Steward's estate, subject to disbursement under the laws of intestacy. The district court affirmed and Ms. Huggins appealed, arguing that the court lacked jurisdiction because POD accounts are excluded from provisions of the probate code.

The Court of Appeals of Kansas affirms. The court rules that Ms. Huggins exceeded her authority as a guardian, and that "the nature or type of instrument or account chosen by a guardian or conservator to perpetrate fiduciary misconduct, even though a payable-on-death nontestamentary account, will not divest the probate court's jurisdiction to remedy such misconduct." The court notes, however, that "[a] somewhat more difficult question of personal jurisdiction would be posed if the nonguardian beneficiaries of the POD accounts had intervened or objected to the court's set-aside order."

For the full text of this decision, go to:  https://www.kscourts.org/Cases-and-Opinions/opinions/ctapp/2003/20031126/90209.htm

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